The postnatal rat kidney is highly susceptible to Lithium (Li+), which leads to significant tissue injury. We hypothesized that Li+ impairs development of the kidney through entry into epithelial cells of the distal nephron, inhibition of Glycogen Synthase Kinase-3β (GSK-3β) through phosphorylation on serine9 (pGSK-3β)and subsequent epithelial to mesenchymal dedifferentiation (EMT). GSK-3β immunoreactive protein was associated with collecting ducts in developing and adult human and rat kidney. Total GSK-3β protein abundance was stable in medulla while it decreased in cortex in the postnatal period in rat kidney. In contrast pGSK-3β protein abundance decreased significantly with development in cortex and medulla. Food pellets containing Li+ was given to female Wistar rats with litters through postnatal (P) days 7-29. At P29, plasma Li+ in offspring was 0.99 mmol/L and quantitative stereological analysis showed reduced total kidney volume and reduced cortex and outer medulla volumes compared to control. At P70, 5 weeks after Li+ withdrawal, stereological analysis showed a persisting reduction of outer medulla volume compared to control kidneys. Li+ treatment (P7-P29) increased pGSK-3β protein level significantly whereas total GSK-3β abundance was unaltered. Li+ treatment increased α-Smooth Muscle Actin (α-SMA) protein level significantly whereas E-cadherin expression was unaltered. In summary, Li+ treatment impairs postnatal development of the kidney cortex and outer medulla and increases pGSK-3β abundance in collecting duct. The data are compatible with the notion that increased GSK-3β activity in the postnatal kidney medulla is necessary for kidney development.